Ever since Bitcoin had its debut in 2009 and started surfing the internet successfully, there has been an ongoing legalization battle for cryptocurrencies. The legal status of cryptos is further discussed in the cryptocurrency legal countries list 2022 article provided by TechTrends.
Cryptocurrency is described as a digital currency used for transactions, and with the help of cryptography, it ensures the transactions’ security. Bitcoin (BTC) was the first highly successful cryptocurrency, and it was not long after when others like Ethereum (ETH), Litecoin (TCC), Dash, and more. With the emergence of many cryptocurrencies, one might wonder which are legal and illegal. Since this digital currency does not have a regulation system as it is not made to, it is hard for countries to make it legal. Although some countries allow cryptocurrency as legal tender, other countries have banned cryptocurrencies. Let’s go through the cryptocurrency legal countries list 2022 and find out.
Cryptocurrency Legal Countries List 2022
When you decide to buy cryptocurrencies, one of the beginning steps you should take is to check if it is legal in the country you are living in or not. It is also wise to know about other countries where cryptocurrency is legal and illegal. Let’s check the cryptocurrency legal countries list 2022.
The legal status of cryptocurrencies differs substantially from country to country, with its regulation being a controversial topic. In the following, we will list the countries where Bitcoin is legal and illegal.
Countries Where Bitcoin Is Legal
People can anonymously use Bitcoin for transactions without any location boundaries. Government has, therefore, shown some currency concerns. Despite many legislators and officials turning their backs on it due to the lack of control and illicit ties, many have set regulations under the Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) laws of their country to lessen its abuse for all the wrong reasons.
In November 2021, the Library of Congress (LOC) conducted a review of many countries’ stances on cryptocurrency’s legalization. Among the many that have legalized its use, we mention some here. Let’s take a look at cryptocurrency legal countries list 2022.
The United States
FinCEN, the U.S. Department of Treasury’s Financial Crimes Enforcement Network, has been giving guidance on Bitcoin use since 2013. It named Bitcoin as a convertible currency equal to real currency or a substitute for it.
Any use of Bitcoin for exchanging or administration is categorized as a Money Services Business (MSB). With an MSB being subjected to the Bank Secrecy Act, it is a requirement to register with the FinCEN and give reports of those cryptocurrency transactions that are more than $10,000.
Furthermore, FinCEN also aims to work on regulations for institutions like banks and crypto exchanges to prioritize tracking and reporting cryptocurrency transitions to know if there are suspicious activities. It will further permit them to investigate those crimes and illicit activities surrounding these digital currencies.
The European Union
More on the cryptocurrency legal countries list 2022; we have the European Union. To them, Bitcoin and other cryptocurrencies are crypto-assets. Although the use of Bitcoin is not considered illegal in the EU, the European Banking Authority pronounced that the activities related to crypt-asset are beyond their control. It continues to raise awareness of the risks of digital currencies.
In 2020, the European Commission finalized a proposal for regulating crypto-assets. The intention behind it is to keep the financial frameworks from fragmenting and offer safety and easy access to cryptocurrency.
Similarly, Canada’s stance is also Bitcoin friendly as the Canada Revenue Agency (CRA) views it as a commodity for income tax goals. In other words, the incomes transacted with Bitcoin are considered business incomes and should be reported as such.
According to Canada, crypto exchanges are money service businesses that put them under the Canadian version of AML/CFT laws. Consequently, crypto exchanges must register with the FINTRAC, Financial Transactions and Reports Analysis Centre of Canada, file a report on suspicious cases, follow the compliance plans and record things.
Like Canada, Bitcoin is a financial asset by the Australian Taxation Office. Its value can be taxed and activated should you trade, exchange, sell, gift, convert it to fiat or use it to buy. There should also be a record of all the transactions for tax goals using Bitcoin.
You may wonder which countries use cryptocurrency as legal tender. Well, El Salvador is the one and only country in the world that uses Bitcoin as legal tender. Bitcoin was approved as a way of payment by Congress and President Nayib Bukele.
Since Cryptos are one of the fastest developing technology markets, Japan decided to join the cryptocurrency legal countries list in 2022. There has been a specific PSA (Payment Services Act) framework that makes Japan one of the countries which allows cryptocurrency as a tool for payment and trading.
As of July 11, 2014, France has been allowed to operate virtual currencies such as Bitcoin and its exchanging and taxation.
To name more on the cryptocurrency legal countries list 2022, here it goes:
- United Kingdom
Countries Where Bitcoin Is Illegal
Whereas many countries welcomed the emergence of Bitcoin, several others are concerned about its volatility and decentralized nature. For some, it is even regarded as a threat to their current monetary systems and a concern for illicit activities such as drug trafficking, money laundering, and terrorism. Some countries banned crypto altogether and even attempted to cut off any requirement that would be crucial for its trading and usage, like banking and financial system support. On the other hand, others restrict its use and do not allow it as a payment tool.
Countries With Implicit Bans (restrictions)
As per the Library of Congress reports, 42 countries have implicit bans on some cryptocurrency uses. They do not allow it as a way of payment, and a few are listed below:
- Central African Republic
Countries With Absolute Bans
According to the reports, there are nine countries that ban cryptocurrency completely:
- North Macedonia
Now let’s get into more details in some of those countries where Bitcoin is banned and some others where it is restricted as in “may not be allowed as a legal tender while its trading is legal.”
After the passing of financial law in 2018 that illegalized the purchase, selling, use, and holding of digital currencies, Algeria banned virtual currencies.
China started being stricter when it came to cryptocurrencies in 2021, and the officials have warned people to stay away from these digital currencies. They also prevented mining and currency exchange throughout China.
The Deputy Director of the Financial Consumer Rights Protection Bureau of the people’s Bank of China, Yin Youping, even named cryptos speculative assets and believes people should “protect their pockets.”
However, undermining the growth of digital currencies is not something they can control, and Chinese authorities seem to be doing that to float their e-currency. The PBoC is even keen to be one of the first central banks to have its own currency. If they do that, monitoring people’s transactions would be easier for them. On September 24, 2021, cryptocurrency transactions were officially banned in China, according to the PBoC.
Since the use of Cryptocurrencies is against their financial regulations – Money Laundering Prevention Act – due to its decentralized nature, the Central Bank of Bangladesh banned crypto-trading. Should people use cryptos, they will face years of imprisonment.
Morocco is on the list of the countries where Bitcoin is banned as its foreign exchange office calls virtual currency transactions “infringement” on forex regulations. This decision was made in 2017, but speculations suggest that Morocco may allow its trading under special conditions in the future.
Colombia is among the countries where Bitcoin is banned, and financial institutions cannot facilitate its transactions. The Superintendencia Financiera announced in 2014 that they might not “protect, invest, broker, or manage virtual money operations.”
Egypt is definitely not among the cryptocurrency legal countries list 2022 as their Islamic advisory body, Dar al-Ifta, decreed in 2018 that Bitcoin transactions are “haram,” which means they are illegal. Although not binding, they made the laws tighter in 2020 to stop its trading or prevent its promotion without a license from the Central Bank.
The following country that prohibits the use of cryptocurrencies is Indonesia, and its central bank has even issued new rules for banning cryptos as a means of payment since 2018.
The relationship is complex when it comes to the Iranian regime and Bitcoin. To escape the most challenging influences of devastating sanctions, Iran decided to do a profitable practice of mining Bitcoin better its import financing.
Although the Central Bank bans cryptocurrencies’ trade overseas, Iran is keen on mining Bitcoin in the country.
4.5 percent of the world’s Bitcoin mining occurs in Iran, which is equal to revenues of more than $1 billion (€843 million), according to Elliptic, the blockchain analytic firm.
Iran provided licensed miners with cheap energy to flourish the crypto industry. However, it needs all mined cryptos to go to the Central Bank. However, people have had to deal with a lot of power shortages due to the 2GW national grid drains on a daily basis. For this reason, Bitcoin mining was temporarily banned until September 22, 2021.
With cryptocurrencies gaining acceptance in some countries, India is among the ones that are growing hostile towards these digital currencies. Its government announced on November 23 that it plans to create a new bill and propose it to the parliament. The purpose is to establish a new central bank-backed digital currency and ban almost all other cryptocurrencies.
In 2021, India intended to criminalize all cryptocurrencies’ possession, issuance, mining, trading, and transference. Narendra Modi, the prime minister, insisted that he wanted certain crypto “does not end up in the wrong hands, which can spoil our youth.”
Notwithstanding authorities’ continuous efforts in banning the use of cryptos, these digital assets are gaining significant popularity in Iraq. However, the Iraqi Central Bank has been hostile about the matter, stating in 2017 that they prohibit its use. In 2021, the Ministry of Interior of the Kurdistan regional government also passed the same prohibition to prevent money brokerages and exchanges from using cryptos.
According to Nepal Rastra Bank, Nepal joined the countries that have banned cryptocurrencies Since August 2017.
The only European country to have prohibited cryptocurrencies, like Bitcoin, Ethereum and others, is North Macedonia.
Although not outlawed, the use of cryptocurrency in Russia has been a controversial conflict.
Russia passed its regulation laws for crypto in 2020, naming them property liable to taxation. The country’s president Vladimir Putin considers the use of cryptos a criminal activity. New legislation has been proposed, allowing police to confiscate cryptos.
With the Turkish lira gradually losing its value, many people started noticing cryptos as their use is highly growing anywhere in the world. The regulations are now more rapid as there has been a lot of inflation since April.
The Central Bank of the Republic of Turkey has illegalized the use of cryptos for payment or services since April 16, 2021. Soon after, president Tayyip Erdogan ordered that if crypto exchanges are used in some firms, they will be considered against anti-money laundering and terrorism financing rules.
Another place not on the cryptocurrency legal countries list 2022 is Vietnam. Their State Bank declared that virtual currencies are illegal and people cannot use them as a means of payment. They further emphasized that there will be a punishment of fines from 150 million VND (€5,600) to 200 million VND (€7,445). However, trading and holding cryptos as assets is not banned in Vietnam.
It is essential to remember that these laws did not eradicate cryptocurrencies, notwithstanding the bans and restrictions put forward by some countries. Their decentralized nature does not allow them to be banned. It also proves that banning Bitcoin and other digital currencies is not in the power of governments unless they ban internet usage across their nation. However, it is good to know the cryptocurrency legal countries list 2022, just in case.